The wash sale rule is a tax law that prevents investors from taking a loss on the sale of an asset and then repurchasing it shortly thereafter in order to avoid paying taxes on the capital gain. The IRS allows this strategy only if the investor does not acquire substantially identical securities within 30 days before or after the sale. This rule is intended to prevent taxpayers from selling an asset at a loss and then buying it back in order to claim a tax deduction without actually giving up ownership of the asset.